Tri-City OKs $480,000 contract with new CEO

However, Larry Anderson won't be part of controversial bonus program

Tri-City Medical Center's new leader will make about $3,000 less
than his predecessor in terms of base salary and will not receive
the controversial bonuses that have irked hospital critics in the
past.

Larry Anderson, Tri-City's chief executive officer, will make
$480,000 per year, according to an 18-month contract recently
approved by the hospital's board of directors. The contract, which
took effect Sept. 1, includes a $50,000 relocation allowance but
does not include participation in Tri-City's "at-risk" compensation
plan, which is tied to the hospital's financial performance.

In 2008, that plan paid former chief executive Arthur Gonzalez
an extra $89,000 on top of his $483,000 annual salary. However, in
some years, he and other executives and managers received no extra
payments.

Board chairwoman Madeline Rodriguez, who wasn't present to vote
on the Anderson contract, said that the incentive program was
omitted because Anderson didn't ask for it. The contracts for
Tri-City's other top-tier executives ---- who replaced seven other
executives ousted in April ---- don't include the incentive
payments.

She said there has been an informal abandonment of the program
among the top ranks of Tri-City leadership because it was unpopular
with the public. Many lower-level managers still participate in the
program because it is written into their contracts.

"In the past it's been a very controversial thing. It's caused
some headaches," Rodriguez said. "Being a district hospital, I
think people don't see the need for bonusing people."

The hospital's incentive program is predicated on the notion
that executives get paid 30 percent less than they are worth.
Managers can earn up to a 30 percent bonus if the hospital meets a
range of goals which include high marks for patient and doctor
satisfaction and turning a profit. Wall Street and many large
companies use similar incentive programs to encourage their
employees to perform.

But some members of public did not buy the notion that the
incentive program represented executives putting part of their
salary "at risk." Most saw the program simply as a bonus package
for executives who already earned far more than an average
employee.

The bonus structure is used by other hospitals, including
neighboring Palomar Pomerado Health, which operates two public
hospitals in Escondido and Poway.

Michael Covert, chief executive officer at Palomar Pomerado,
earns $554,403 per year and is eligible for a bonus of up to 50
percent of his salary. Though he will not get one this year,
Covert's bonuses have ranged from $72,000 to $165,400 in previous
years.

Anderson, who has been commuting to Tri-City from Orange County,
said through a hospital spokesperson Friday that he intends to move
to North County.